Getting Help To Solve Your Debts
Despite the fact that more than 60% of UK adults went into 2020 with personal debts, there is still quite a stigma attached to being in debt and this can be a barrier to some people getting help when they need it. Being in debt can be associated with feelings of shame and anxiety, and the bigger your debt the more intense these feelings can become. People who have found themselves in this situation may feel that they are unable to get the help they need, firstly because they have a fear of being judged for their circumstances, but also because help can be difficult to find if you don’t know exactly where to look for it.
Part of what makes getting help so challenging is that the kind of help you can get depends on the amount and type of debt you have. Some kinds of help require you to meet very specific criteria in order to qualify for assistance, whereas other types of help use a referral system to make sure the right people are connected to the right services. The most important thing you can do when you are looking for help with your personal finances and debts is to look at your entire situation in detail.
By taking stock of your finances and debts you will be able to get the most appropriate help for your personal situation. It’s important that you are completely honest with yourself throughout the process and don’t try to hide assets. You need to make sure all your expenditures are accounted for, too. Look to include information on the following:
- Rent arrears
- Personal loans
- Money you owe to friends and family
- Council tax arrears
- Credit card repayments
- Overdrafts
- Utility bills such as energy and water bills
- Contracted payments such as mobile phone plans
Once this information has been gathered you should have a much clearer idea of what you owe and to whom. This is a vital first step to getting the help you need, but it can feel confronting and overwhelming. Next, you need to look at the details of each debt and list them next to each of your debts. Be sure to include information on who the creditor is, how much you have paid to date, how much you still owe, when you missed payments, your account reference numbers relating to each debt, and all the correspondence you have sent and received from the creditor.
This will make it much easier for you to find the right assistance, whether that is IVA debt help, bankruptcy or a different kind of debt management plan. As mentioned, it can be stressful and overwhelming to see all your debts listed in this way, but try to remember that you are doing the best thing you can by taking the first steps to managing your debt. It will also help you to think about things in a more pragmatic and less emotional way.
Exploring your options
If you have gotten to this point and have everything laid out on paper, the next step is to look for professional, impartial help. Debt management and advice is offered free of charge by many organisations in the UK and you can easily find them online. They will be able to review all the information you have gathered on your own personal situation and will then be able to advise you on the best steps to take next.
Depending on your exact circumstances, including what you owe and to whom, you may find that an IVA, or individual voluntary agreement, is the best course of action. These agreements are negotiated by a third party who will collect a single monthly payment from you that will be distributed to your creditors. This approach can be expensive but many people find them much more manageable than trying to handle all their creditors separately.
Alternatively, you may be recommended to file for bankruptcy. This can be scary, but it is a temporary condition that you will be able to work through with some improved financial management. Once the bankruptcy period is over you will be able to go on and start rebuilding your credit rating.